According to experts, the 9 fastest ways to pay off debt

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If you’re trying to pay off your debt this year, you’re not alone. According to Fidelity’s 2022 Financial Resolutions Study, 41% of respondents said paying off debt is one of their top financial resolutions.

As you pay off your liabilities, it can be motivating to see you’re making progress, which means your payment strategies should be quick, efficient, and effective. To that end, here are nine of the fastest ways, according to experts, to pay off debt so you can live a richer life.

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Primer: How to Calculate Your Debt to Income Ratio

Set a goal

“Make sure you understand why you want to get out of debt and what your goal is,” said Jay Zigmont, Ph.D., CFP and founder of Live, Learn, Plan, a Mississippi-based financial planning firm. “Your goal should be SMART: specific, measurable, achievable, relevant and time-based. It’s not enough to say that you want to get out of debt. Be specific, like I want to pay off $6,000 in debt over the next 12 months. Then you can break that down into mini goals of $500 a month.”

Get a budget

“Make sure all your money has a job before the month starts,” Zigmont said. “If you plan to pay off your debt with what’s left over, you’ll never make any progress. There are many budgets out there. Budgets are like diets. The best is what works for you.”

See more: How Millennial Women Can Take Control of Their Debt

Follow the debt avalanche method

“Pay the minimum amount on all debts, but pay an additional amount each month on debts with the highest interest rate,” said Lyle Solomon, lead attorney at OVLG Payday Loan Consolidation. “Keep doing this until you stop. Once you eliminate it, pat yourself on the back. You’ve reduced your overall debt and the interest you owe. Now you can focus on the next expensive debt.”

Follow the debt snowball method

Here is an alternative to the debt avalanche method.

“The point here is to pay off the smallest balance first,” Solomon said. “Make additional payments on the smallest balance while making minimum payments on the others. Continue until you have cashed out the smallest balance. When you’re done, roll over the amount and apply it to the next smaller debt. Work your way up to the most important balance. This method works, and you get a psychological boost when you eliminate all guilt.”

Increase your income

“Finding a way to increase your income increases cash flow, or room in your budget, which frees up more money that can be used to pay down debt,” said Nika Boothe, founder of Debt Free Gonnabe. “Some quick ways to increase income include selling items from around the house, asking for a raise, selling services or crafts, babysitting or pet sitting, etc. The more money that can be devoted to paying off debt, the more money that can go towards paying down the principal, resulting in less interest accruing over the time it takes to pay off the debt.”

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Pay bi-weekly

If you want to pay off your mortgage faster, consider this suggestion.

“Consider paying off your loan twice a month instead of once a month,” said Trae Bodge, smart shopping expert at TrueTrae. “By paying half (your payment) two weeks ‘early’, the amount of interest you can save over time can shave years off your loan.

“When I started my first apartment in my mid-20s, I had to use an outside service, but many lenders now offer this service. You just have to ask for it. Make things move even faster by adding a little something extra to your capital with every payment.”

Ask for a lower interest rate on your credit cards

“A lot of people don’t realize that the APR that goes into calculating their interest rate is variable, which means it can change from time to time,” Boothe said. “However, a lower interest rate means more of your payment can be applied to the principal and you will be charged less interest, helping to pay off the debt faster.

“The odds of a lower rate hike if you’ve had your card for a while and have an excellent payment history and/or have recently experienced an increase in your credit score.

“It’s important to clarify if you’re asking for a lower interest rate, whether the new interest rate applies to previous and/or new purchases, and to state whether it’s a promotion (for a limited time). A simple but effective script is: “Hi, my name is X. I’ve been a customer for X years and I’m calling to see if I’m eligible for a lower interest rate.”

Related: Best Balance Transfer Credit Cards

Benefit from a balance transfer

“You can also transfer your high-yield credit card balance to a low-yielding account,” Solomon said. “This is where a balance transfer comes into play. You can pay off your high yield credit cards with the Balance Transfer Card and then pay them back within 12-18 months at 0% APR.”

Use windfall with caution

“When you get cash back from your job for your tax return or a bonus, it’s fun to take that financial windfall and use it to book a trip or go shopping,” Bodge said. “Instead, take a chunk and pay it to your capital, and do so immediately so you don’t even miss out.” You can still have fun with some money, but if you spend extra money on your debt this way, you can pay it back faster.”

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About the author

Cynthia Measom is a personal finance writer and editor with over 12 years of collective experience. Her articles have been published in MSN, Aol, Yahoo Finance, INSIDER, Houston Chronicle, The Seattle Times and The Network Journal. She attended the University of Texas at Austin and earned a Bachelor of Arts in English.

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